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1 The Virtual Power Station - achieving dispatchable generation from small scale solar John K Ward, Tim Moore, Stephen Lindsay CSIRO Energy Technology, Newcastle, NSW 24 Australia Keywords: forecasting, optimization, economic benefit Abstract: Renewable generation is by its very nature intermittent, so as Australia moves towards lower greenhouse gas intense generation, the electricity supply system must either develop methods to manage this intermittency or risk outages. The CSIRO has just completed a 12 month trial of its Virtual Power Station (VPS) system consisting of a deployment of small scale PV generation sites around the Lake Macquarie area, co-ordinated via a communications and control system. By combining the outputs of this diverse set of PV systems and making use of solar generation forecasts and a small battery storage system, the VPS is able to provide a firm net generation output (using a 10 second control interval and 5 minute dispatch interval) with similar reliability to conventional generation systems. This paper specifically considers the practical issues involved and an analysis of the results achieved in this trial VPS deployment. These factors include: the value of such a system to the electricity network; experiences and reliability of utilising 3G network based communications for real-time control; and indicative VPS system scale needed to achieve meaningful network benefits. Results of the trial clearly demonstrate the viability of such an approach, which when combined with other demand side initiatives (including cogeneration, critical peak pricing and demand response) provide a credible alternative to further construction of centralised generation, transmission and distribution infrastructure. Contact author: John K Ward INTRODUCTION Strong growth in Australia s peak electricity demand (see figure 1) is resulting in increasing numbers of constrained network distribution areas. This has been widely attributed to the increasing uptake of air-conditioning, particularly within residential areas, though there is increasing concern over the impacts of new load types such as electric vehicle charging. While the traditional solution has been to build additional generation, transmission and distribution infrastructure, this is increasingly being recognised as an inefficient and costly solution, given the small number of hours per year that such peaks occur. An alternative approach that is gaining interest is to solve these problems from the demand side - through the use of distributed renewable energy systems, cogeneration and load (demand) response schemes.

2 Figure 1. Whole of NEM (National Electricity Market) demand growth. Despite substantial correlation between electricity demand and photovoltaic power generation, the intermittency of renewable sources has meant that renewable generation cannot be relied upon and as such do not ameliorate the need for network augmentation. This was investigated in detail for the Kogarah Town Square 1kW photovoltaic system [Energy Australia, 05] and more recently as part of the NSW review of solar feed-in tariffs as conducted by IPART (Independent Pricing and Regulatory Tribunal)[IPART, 12]. Demand side options have long struggled as a viable network management option due to the high transactional costs involved in managing large numbers of small and potentially unreliable resources. Simply put, it is easier for a utility to manage a sub-station or distribution upgrade than to coordinate and ensure reliable operation of resources spread across multiple customer sites. This situation is however improving due to a number of smart grid initiatives. Smart metering is providing individually addressable real-time communications to customer sites; home area network (HAN) solutions are being used for communication and coordination of devices within a customer site; and appliance standards (such as the AS4755 series) are providing a common electrical interface and set of response modes for different appliance types. The CSIRO Virtual Power Station (VPS) trial was setup in collaboration with Lake Macquarie City Council (LMCC) to assess the technical feasibility and performance of a system that coordinates the generation at multiple () geographically dispersed small scale PV generation sites in conjunction with a small battery energy storage system to present a single virtual net generation capacity (of up to kw for the trial). The VPS has been designed to have reliability and controllability commensurate with that of large scale generators. In providing a managed solution, the VPS overcomes the high transactional costs, coordination complexity and unreliability that would otherwise prevent utilities from recognising the network benefits from small scale renewable generation. This paper reports on the performance of the LMCC VPS deployment during the 11 calendar year. Specific consideration is given to: energy retail conditions and customer cost drivers; the impact of PV system orientation;

3 a comparison of PV intermittency with other site loads; an assessment of the number of nodes required for a full scale VPS deployment; and the suitability of the 3G wireless communications. MOTIVATION: ELECTRICITY RETAIL & NETWORK CONDITIONS In recent years, there have been substantial changes to the way in which small scale solar generation has been financially rewarded - against a backdrop of increasing conventional energy costs (Figure 2). The three solar generation schemes currently in place in NSW are: c/kwh feed in tariff which provides an incentive to utilise gross metering, and maximise total annual energy output. This is a legacy scheme; c/kwh feed in tariff which provides an incentive to utilise net metering. This is a legacy scheme; and ~8c/kWh energy payment following the IPART review [IPART, 12] of solar feed in tariffs in late 11. This provides an incentive to align generation with site loads and utilise net metering. Energy cost (c/kwh) or Capacity charge (c/kva/day) 10 TOU Peak - Residential TOU Peak - Businness Capacity - Business Year Figure 2. Plot of increases in peak time-of-use (TOU) prices and network capacity charges over the last 10 years (for the Ausgrid network area). [data from IPART] Although NSW solar generation schemes no longer provide significant reward for renewable generation, increases in retail electricity prices means that there are now individual site level opportunities to manage generation and energy storage. Specifically in the case of VPS sites with energy storage capability, this can include: Managing export of energy to maximise revenue and minimise cost. This may include bulk energy transfer from off-peak to peak times; and Managing peak site loads to reduce capacity charges where appropriate (business users). From a network perspective, small scale generation provides the greatest benefit if it can be guaranteed to be available at times of peak demand, as it is ultimately peak demand that drives infrastructure and consequently energy costs. A common belief (and one argued strongly in submissions to the IPART small scale PV review [Ausgrid, 11]) is that small scale PV systems provide no network benefit. In the case of residential feeders the peak load

4 occurs late afternoon or early evening when the PV system output is minimal. The VPS system seeks to address this by combining storage with an aggregate group of PV generators to ensure that energy output can be guaranteed when it is needed. In terms of valuing peak demand reductions, an ongoing reduction is typically valued at around $00/kVA [CME, 12], though a more common scenario is where a reduction is sought for a certain number of years to defer a network upgrade, rather than avoid it entirely. Indicative value of network upgrade deferrals is included as part of network upgrade assessments, and in the case of Ausgrid (the distribution network service provider for the LMCC VPS trial), these cases are available at: Some indicative (though chosen to be worthwhile cases) benefits of network upgrade deferrals for recent Ausgrid works are given in Table 1. Crows Nest Location $248/kVA Estimated $/kva benefit Charmhaven Waverly Peats Ridge $1/kVA (2 year deferral) $581/kVA (4 year deferral) $716/kVA (3 year deferral) Table 1. Value of network upgrade deferral These serve to give an indicative value to the VPS if it can ensure generation is available at peak times. Although network upgrade deferral is a distribution network benefit, additional benefits may be accrued by managing generation export to occur at times of high NEM prices. THE CSIRO VPS TRIAL SYSTEM The CSIRO Virtual Power Station technology aggregates a large number of geographically dispersed and technically diverse small scale renewable energy generators together to form a virtual power station, which presents to the electricity system as a single reliable dispatchable entity. This dispatch capability can be used to manage exposure to high NEM spot prices or to address specific network constraints by exporting additional (stored) energy when required. Being comprised of multiple renewable generators, with the output of each being very dependant on their specific local environmental conditions, it is only through advanced forecasting, communications and control that these resources can collectively provide a firm, dispatchable generation capacity. For the LMCC VPS trial, each of the individual site nodes was retrofitted with a small embedded controller that interfaces to the inverter to monitor energy which is communicated to the VPS central control and monitoring system hosted by CSIRO. Site sizes ranged from 1kW to 10kW, with the total trial VPS system peak output just over kw. Sites that have both generation and battery storage also receive a battery charge setpoint from the VPS central control system, which is used to balance the total output of the VPS as is required due to the inevitable (minor) mismatch between forecast and actual generation output. The planned VPS output is determined on a 5 minute cycle (consistent with NEM dispatch) and regulated with a 10 second control loop. Communications between sites is achieved using 3G wireless modems, which operate to transfer data over the existing mobile phone network.

5 Figure 3. Example of a VPS node, consisting of a 3kW inverter connected to an embedded controller with wifi communications. The VPS central control system also implements a database storing 10 second sampled data from each of the sites and provides a web interface. This allowed easy visualisation and reporting of the system performance, and has also served as an engagement tool for LMCC trial participants, allowing them to monitor their systems in real time, in comparison to other sites, and see their contribution to the VPS system as a whole. RESULTS Having just completed a 12 month trial of the VPS system in conjunction with Lake Macquarie City Council, we can report on the practical issues involved and an analysis of the performance of this trial VPS deployment. In this paper we specifically consider: the impact of PV system orientation; a comparison of PV intermittency with other site loads; an assessment of the number of nodes required for a full scale VPS deployment; and the suitability of the 3G wireless communications. Impact of PV system Orientation Attempting to align PV output with the needs of the electricity generation and distribution system can be achieved by a combination of energy storage to shift generation, and panel orientation to change when the generation occurs. Although most PV systems use a fixed array orientation, there is often some choice here during design/build of a PV installation and optimising this panel orientation provides a cheaper alternative to energy storage though is of course constrained by building architecture. Using measured data from different sites, Figure 4 illustrates typical generation profiles of systems with different orientations, and how this aligns with average NEM prices, with westerly oriented systems providing the best alignment.

6 95 $/MWh or Normalised PV output Average NEM Price PV Output - North Oriented PV Output - East Oriented PV Output - West Oriented LMCC VPS Trial System Time (Hrs) Figure 4. The variation between generation profiles of systems with different orientations and how they align with NEM prices. In terms of achieving maximum annual energy production, optimal array inclination and orientation are well understood - for example, see CEC 09, or Mondol et al. Figure 5 shows the calculated annual energy output of an array as a percentage of maximum possible for different panel orientations in this case, calculated using NREL PVWatts program with International Weather for Energy Calculations 1 (ASHRAE 01) weather files for Sydney, Australia. Percentage of possible Yearly output by Tilt and Azimuth 95 Tilt Azimuth Figure 5. Impact of array tilt and azimuth on annual energy production (% of maximum) However, annual energy output (yield) is not the sole consideration as the generated energy is most value to the network at times of peak demand - peak TOU tariffs serve as a proxy for 1 The IWEC data set contains typical annual weather data for cities throughout the world. The data is made up of a combination of real data from different years to produce a composite data set whose characteristics are typical of annual weather patterns.

7 98 this, providing incentive to offset energy at these times. Figure 6 shows the effective annual revenue from a system with net metering, offsetting an Energy Australia TOU energy tariff. In this case, we see that the optimal benefit is obtained with an array orientation around deg west of north, and we note that when comparing the two figures (5 & 6), this westerly orientation does not significantly impact total annual energy output. % of Maximum Yearly Revenue under TOU tarrif by Tilt and Azimuth Tilt Azimuth Figure 6. The effective annual revenue (as % of maximum) for a PV system with net metering, offsetting an Energy Australia TOU tariff. Hence, where possible, a VPS that orients arrays slightly westerly can have a better cost effectiveness under current tariff arrangements and be better placed to provide capacity at times of network peaks. Storage would enhance or extend this effect, however the additional costs may well outweigh the benefit. Assessing intermittency comparing PV and loads The intermittency (fast fluctuations in load and generation) of renewable generation is often cited as a limiting factor to widespread deployment of such systems throughout the electricity network with limits around 10-% commonly suggested. As an example of this concern, Horizon Power in Western Australia has recently introduced technical requirements for solar installations that include requirements for substantial output smoothing. Undoubtedly there is considerable output variability associated with renewables when compared to the output of traditional power generation systems figure 7 shows the generation output as recorded at one VPS node on a cloudy day. For the climate in Newcastle where the VPS is being trialled, cloudy days are common and variability of this type is representative of what is often seen. In addition to measurements of PV system generation, some monitoring was also carried out on other (residential) site loads & voltages. This helps to provide a better understanding of the relative electricity network impacts of renewable generation as compared to the variability and characteristics of typical consumer loads. An example of captured load data (in this case dominated by a washing machine, plus a hot water service turning on) is presented in Figure 8 and clearly demonstrates that the variability due to a typical residential scale solar system is significantly less than that encountered in other common loads.

8 Figure 7. Significant generation variability as seen at one VPS node on a cloudy day. Figure 8. Load variability as measured in a typical residential site For the VPS, and small scale solar more generally, this indicates that although PV systems introduce variability into the distribution system, this is of a similar magnitude to consumer loads. Assessing the Number of VPS Nodes Required There are two key factors in assessing the number of nodes required in the VPS: 1. Having sufficient capacity to provide a sufficient magnitude response within a specific geographic location if network upgrade deferral costs are being targeted. This really needs to be considered on a case by case basis, however as a guide, a capacity of ~2MVA that can be guaranteed to be available at peak times is indicative of requirements for network upgrade deferral. In the case of 2kW PV systems, this would represent the output of 1000 sites if they can be guaranteed (through use of energy storage) to be available at peak network times which may be late afternoon. 2. Providing sufficient diversity of sites such that the variance seen in VPS system output between control intervals is sufficiently small. In considering how aggregating sites can reduce variance, we note that for the deployed LMCC VPS system, no significant correlation was found between sites within each 5 minute dispatch interval. Figure 9 shows the variability at a 10 second level (corresponding to the VPS control interval), for 3 cases: 1. A single VPS node; 2. The whole ( node) LMCC VPS system; and

9 3. An artificially constructed data set, made up of real data from the LMCC VPS, but representing the output of a system 10 times the size of the actual system (~0 nodes). Figure 9. Assessment of variability of VPS output over a 10 second interval for different numbers of nodes. It can be seen that with nodes, there is typically less than 10% variability over a 10 second interval, dropping to around 2% for 0 nodes. (As an example, for a 100kW system with 0 nodes we would expect less than 2kW variability). The relevance of this finding for the VPS is that with a 10 second control time for this dataset, a VPS system should have at least nodes to counter variability at or below 10 seconds. IT and Communication System Performance The LMCC VPS system utilised a 3G communications system with standard commercially available modems to provide communications between nodes. In terms of reliability, several of the sites communications were not available at times. Latency is assessed based on the time between messages within the trial LMCC VPS system. Messaging for this trial was intended to occur at a regular 10 second interval, however only around % of packets arrived on time (to nearest second), around 98% of packets arrived within seconds and almost all within 45seconds. This analysis is based on over 33 million data samples, so is considered statistically valid. The impact for the VPS is that with this level of latency/delay, the 3G system is marginal for control within the 5minute NEM dispatch intervals. For managing bulk charge/discharge control (such as between TOU periods), the 3G system is adequate however in all cases, the 3G system is (at current costs) too expensive for widespread deployment. CONCLUSIONS The Virtual Power Station (VPS) system is able to combine the outputs of this diverse set of small scale PV systems and making use of solar generation forecasts and a small battery storage system, is able to provide a firm net generation output (using a 10 second control interval and 5 minute dispatch interval) with similar reliability to conventional generation systems.

10 By achieving reliability of response, the VPS is of higher value to the electricity network and could be used for applications such as peak demand management when targeting deferral of a network upgrade. With nodes, the trial VPS system was smaller than ideal to achieve the targeted level of impact and have sufficient diversity between nodes for this, 0 to 1000 nodes would be needed. For the trial, control was enacted over the 3G mobile phone network which incurred patchy coverage, and latency that make it marginal for this application and alternate communications would need to be investigated for future work. Results of the trial clearly demonstrate the viability of the VPS, which when combined with other demand side initiatives (including cogeneration, critical peak pricing and demand response) provide a credible alternative to further construction of centralised generation, transmission and distribution infrastructure. ACKNOWLEGEMENT CSIRO would like to acknowledge the support of Lake Macquarie City Council & especially James Giblin in trialling the VPS system. REFERENCES American Society of Heating, Refrigeration and Air-Conditioning Engineers (ASHRAE) (01). International Weather for Energy Calculations (IWEC). ISBN: Ausgrid (11), Effect of small solar PV systems on peak demand. Available online at: Clean Energy Council (CEC) (09). Grid-Connected PV Systems - System Design Guidelines for Accredited Designers. July 07, updated November 09. Available online at CME (12), Reducing electricity costs through Demand Response in the National Electricity Market. August Energy Australia (05), Kogarah Town Square Photovoltaic Power System - Demand Management Analysis. Available online at: IPART (12), Solar feed-in tariffs. Setting a fair and reasonable value for electricity generated by small scale PV units in NSW. March 12. Available online at: Mondol, J. D., Yigzaw G. Yohanis, Y. G., & Norton, B. (07). The impact of array inclination and orientation on the performance of a grid-connected photovoltaic system. Renewable Energy 32 (07) Elsevier. BRIEF BIOGRAPHY OF PRESENTER Dr John K. Ward, CSIRO Energy Technology Australia. Dr Ward is a research team leader at the Commonwealth Scientific and Industrial Research Organisation (CSIRO). His research is focused on adding intelligence to the interaction of distributed energy systems within the electricity distribution network. This is a key requirement for enabling high penetration renewable energy generation as needed for a greenhouse gas constrained future.

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